Unlike other assets, a person’s superannuation does not automatically form part of their estate. Therefore even though a person’s will may state that they wish assets to be distributed in a certain way, this will often have little or no consequence on what actually happens to the superannuation fund monies. This can often be a significant amount of money - particularly in the deceased had death benefits/insurances through his/her super fund which is often in addition to years of super accumulation.
Under Section 59(1A) of the Superannuation Industry (Supervision) Act 1993 (Cth) and regulation 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth), a member of a superannuation fund is allowed to make a binding death nomination. This allows for a legally binding documents to be created which allows the member to advise the trustee of their superannuation who should receive their superannuation benefit in the event of death.
A member may only nominate a ‘dependant’ to benefit from their superannuation after their death. A dependant is any of the following:
Spouse;
Children;
Someone financially dependent on the member;
Someone who the member is in an interdependent relationship with; or
A legal personal representative.
A binding death nomination therefore provides certainty as to where superannuation funds and any life insurance payments are directed to.
If a person does not have a binding death nomination in place at the date of their death, the Trustee of your superannuation fund must pay your benefit to one or more of your dependants in predetermined proportions as required by law. Therefore, by having a binding death nomination, a person can direct where you want your benefits to go with a high level of certainty. If a person dies without a binding death nomination, then they risk having their super monies being distributed in a way that does not accord with their wishes.
--
If you disagree with the distribution made by a trustee, you can make a complaint to the Australian and Financial Complaints Authority (which has taken over the functions of the Superannuation Complaints Tribunal). The process is designed to allow self representation however if you require assistance with making a complaint and to know where you stand, please contact us.
--
Typically, you can contact your superannuation fund to find out whether you have a binding death nomination in place and whether you need to update it. Some nominations expire and it is important for you to keep track of such dates. If you have a self managed super fund, you need to ensure that you have made a valid binding death nomination in accordance with your fund’s trust deed.
ASAP Lawyers take pride in helping our client’s in their estate planning process. Contact us on 03 9450 9400 for a confidential consultation with an expert.
Comments